What is a Medicare Premium?
A premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums.
For most people, the Medicare Part A premium has no monthly costs. Premium-free Part A coverage (hospital insurance) is paid in full through payroll taxes. Certain deductibles and coinsurance also apply.
Most people do pay a monthly Medicare Part B premium for their health coverage. This premium changes yearly and is based on a beneficiary’s annual income. See Income Related Monthly Adjustment Amount (IRMAA). An annual deductible and coinsurance also apply.
Medicare Advantage plan members may pay an additional monthly premium if their Part A and Part B premiums do not cover the full cost of the plan. Some plans have an annual health plan deductible and all plans have copayments on health services.
Medicare prescription drug plans (Part D) have a monthly premium, annual deductible, and copays or coinsurance on each prescription.